Former Detroit school official asserts that land deals were handled properly

Dec. 2, 2009
Investigation has raised questions about construction projects from 1994 bond proposal
From The Detroit Free Press: The former Detroit Public Schools official who oversaw construction projects funded by a $1.5-billion bond in 1994 says officials followed state law and were involved in "absolutely nothing improper." Robert Francis testified for four hours during a hearing that district emergency Financial Manager Robert Bobb called to probe what he says were questionable land deals.

NOVEMBER 2009...from The Detroit News: Detroit school district officials say they will file a lawsuit to force testimony from witnesses who have refused to participate in hearings targeting questionable real estate deals. Five public hearings have been held as officials look into questionable real estate deals organized under previous administrations.

Earlier....from The Detroit Free Press: Two more witnesses with ties to the Detroit Public Schools say that deals involved in the 1994 school construction bond program raised questions, but they were powerless to do anything about it. Then-Mayor Dennis Archer had "grave concerns" about the school district's ability to manage $1.5 billion that voters approved for the district in 1994, Freman Hendrix, Archer's former chief of staff, testified. Floyd Allen, whose firm Floyd E. Allen & Associates was hired to work on real estate deals for the district, also testified that he had concerns and informally questioned the asking prices for land for new schools.

OCTOBER 2009....from The Detroit Free Press: The Detroit school system paid double the appraised value for about two dozen parcels of land, school officials say. The land was appraised at $2.7 million, but the district paid $5.6 million partly because of what officials said was a real estate flipping scheme, according to information that school investigators compiled.

Earlier...from The Detroit Free Press: The Detroit Public Schools overpaid for office space at the Fisher Building, and land where some new school buildings were constructed, school officials said at a hearing. In 2002, the district paid about $24 million to buy five floors in the Fisher Building, concourse space and 720 parking spaces, and another $17 million for renovations. No appraisal was done for the deal. Mark Schrupp, the district's executive director for physical plant operation and construction, said that Farbman Group as a broker to find space for district headquarters, but ended up buying the Fisher Building space from Farbman, then paid a Farbman-affiliated construction company to renovate the office space at high, no-bid costs.

SEPTEMBER 2009...from The Detroit News: The Detroit school system overspent millions in taxpayer money in real estates purchases related to the Fisher Building, Cass Technical High School and the Detroit School of Arts, according to an investigation by the district's inspector general. The findings indicate in several cases the district did not buy land directly; instead, the property passed through the hands of other agents at considerable markup--up to seven times its value.

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